How to avoid mistakes and increase your profits
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Many beginner traders ignore pivot points, which often leads to losses. For example, Janek, trying to predict market movements without pivot points, lost 500 zł on one trade, which accounted for 5% of his capital. Another common mistake is setting stop losses too tight near pivot points, which results in premature position closures. Ania, with a capital of 10,000 zł, lost 300 zł (3% of her capital) when her stop loss was triggered just before the trend reversal. Another mistake is ignoring the spread, which in combination with slippage can significantly impact the transaction outcome, as was the case with Tomek, who lost an additional 200 zł due to a too wide spread.
Errors in trading arise from a lack of clear entry and exit strategies. Pivot points act as automatic support and resistance levels that can help identify key moments for entering and exiting positions. Not utilizing them increases the risk of making decisions based on emotions, leading to unstable results. When spread and slippage come into play, even small mistakes can lead to significant losses.
Assuming you have a capital of 15,000 PLN and you trade without considering pivot points. The average loss per trade is 3%. Over the course of a month, executing 20 trades, your losses could reach 900 PLN, which constitutes as much as 6% of your capital. Considering that with pivot points you could achieve a profit of 2% per trade, your potential gains could amount to around 600 PLN per month. Ignoring this tool is a real risk of losing part of your capital.
Here are a few steps that can revolutionize your approach to trading:
Analyze the charts with designated pivot points daily before the market opens.
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